HP announces 24,600 job cuts, takes one-time $1.7 billion EDS charge

The company said it would provide employees affected by this restructuring program with severance packages, counseling and job placement services.

The $13.9 billion acquisition of EDS, a deal which closed last month, strengthened HP's presence in the US and in Britain, two strong markets for EDS, both among government agencies and commercial clients, and made HP the world's second largest provider of IT services, up from No.5 previously. IBM is currently the world's largest provider of IT services. HP and EDS had a combined $38.8 billion in services revenue last year. In comparison, IBM had $51.4 billion in total technology and business-services revenue in 2007.

The deal also made HP the No.1 provider of "applications management" i.e. providing maintenance and outsourced management of older software systems.

"We are good at integrating companies...I believe we will do it well," HP Chairman and CEO Mark Hurd said, recalling the company's 2002 mega-merger with Compaq Computer and a series of software deals HP has made in recent years to bolster its business of helping companies automate and manage their networks and systems.

After the $18.9 billion Compaq deal, HP cut 16,800 employees, or about 11 percent of the combined workforce.

HP also said it would record a charge of $1.7 billion in the fiscal fourth quarter ending in October relating to the restructuring program. Accounting for goodwill would cost $1.4 billion, while cost of the restructuring would involve another $300 million, it said.